Business Risk Assessment - for AML

AML Business Risk Assessment: what is it and why is it important for your business?

Understanding AML Business Risk Assessments for Designated Non-Financial Businesses and Professions (DNFBP)

In today’s evolving regulatory landscape, DNFBPs such as trust and company service providers (TCSPs), legal professionals, accountants, and real estate agents are under increasing scrutiny to identify and mitigate their exposure to money laundering and terrorist financing risks. A critical tool in this process is the Anti-Money Laundering (AML) Business Risk Assessment (BRA).

A BRA is a structured evaluation of an entity's exposure to money laundering and terrorist financing. It is required by law whether you are in Monaco, Malta, and Mauritius and aligns with global Financial Action Task Force (FATF) standards. The assessment enables firms to understand their unique risk profile and to tailor their internal controls, policies, and procedures accordingly. Far from being a tick-box compliance exercise, a BRA is a dynamic management tool that supports sound governance and reputational integrity.

Why Is a BRA Required?

Each jurisdiction mandates the use of a BRA as part of a risk-based AML compliance regime:

Monaco has transposed FATF standards into local law, requiring all obliged entities to conduct and maintain a documented BRA aligned with national risk findings.
Malta requires all subject persons, including DNFBPs, to document and update a BRA annually, as outlined in the Prevention of Money Laundering and Funding of Terrorism Regulations.
Mauritius mandates similar obligations under the Financial Intelligence and Anti-Money Laundering Act (FIAMLA), with guidance issued by the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU).

Key Risk Factors

To perform a meaningful BRA, firms must evaluate several core areas:

Client risk: Who are your clients? Are they politically exposed persons (PEPs), foreign nationals, or operating in high-risk sectors or jurisdictions?
Service risk: Do you offer services that are inherently higher-risk, such as nominee directorships or cross-border trust formation?
Geographical risk: Are your clients or counterparties based in countries with weak AML controls?
Delivery channel risk: Do you onboard clients in person, remotely, or via intermediaries?

By mapping these factors, firms can identify where inherent risks exist and apply controls to reduce them to acceptable levels.

Turning Risk Awareness into Action

Once risks are identified, the BRA becomes the foundation of an effective AML program. High-risk clients may require enhanced due diligence and closer ongoing monitoring. Service offerings may need extra layers of approval or documentation. The BRA also informs staff training, helping employees understand specific threats relevant to their work.

For example, a real estate agent in Malta may identify that high-value transactions with foreign cash buyers pose elevated risks. Enhanced source-of-funds checks and more frequent reporting to the FIU may be warranted. A Monaco-based law firm offering fiduciary services to international families owning real estate or yachts may use the BRA to limit the use of complex offshore vehicles or impose stricter onboarding checks.

Comparative Insights: Monaco, Malta, Mauritius

Despite local differences, these three jurisdictions share key principles:

All require documented BRAs that are reviewed and updated regularly.
All expect firms to integrate BRA findings into their policies and procedures.
Each jurisdiction publishes national risk assessments (NRAs) or sector guidance that firms must reflect in their internal assessments.

Where they differ is in implementation. Malta is highly prescriptive, requiring BRA submission through an annual online platform and issuing detailed feedback. Mauritius focuses more on sector-specific guidelines and supervisory inspections. Monaco, while maintaining a flexible regime, places high importance on incorporating national risk intelligence and industry tools developed in collaboration with its regulators, and the BRA must be available for AMSF inspection.

Why a BRA Matters

An effective BRA does more than fulfill legal obligations. It protects your business, clients, and professional reputation. As regulatory expectations grow and the financial crime landscape becomes more complex, a robust, well-informed BRA helps demonstrate that your firm is proactive, diligent, and trustworthy.

At Rosemont International, we assist clients across Monaco, Malta, and Mauritius in navigating these regulatory expectations with clarity and confidence. Whether you are a fiduciary, legal adviser, accountant, or estate agent, understanding and implementing an effective AML BRA is a vital step in safeguarding your operations and building trust with regulators and clients alike.